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Amazon for Atlanta?

The Georgia capital’s candidacy for HQ2 is just one of many windows onto a vibrant state economy.

by GARY DAUGHTERS

“Achilles Heel”: Atlanta rates as the country’s fourth-most congested city in a recent study by INRIX.

When Amazon announced finalists for its second headquarters location, some Atlantans were thrilled to see their city at the top of the list. Alas, the list was alphabetical. But that doesn’t mean Atlanta’s not a top pick.

To gauge how Atlanta stacks up among other HQ2 contenders, Site Selection reached out to some of the city’s top business and civic leaders, as well as corporate real estate analysts. Here’s a sampling of what they told us.

KP Reddy, Serial Entrepreneur, Founder of Shadow Ventures:
As far as Amazon goes, the airport is a huge asset for Atlanta. If you move down here from, say, Chicago to work for Amazon, knowing that you can get back home makes life easy. It’s a major asset. I go to New York all the time for the day, and I don’t have to connect anywhere or do any of that. I hit the 6 a.m. flight to La Guardia and I’m back by dinner. Flight availability is very important.

With Georgia Tech, Georgia State, Emory, Spelman, Morehouse and Clark Atlanta, there’s a great talent base for Amazon to pick from. I went to Georgia Tech, and one of the things they’ve struggled with is retention in Atlanta. All the top performers end up jumping on a plane and working for Amazon and Google, so this becomes a great way for them to retain that talent here.

I think Atlanta’s a good fit. We have great cultural diversity and a great LGBT community. Those things matter in terms of recruiting. I think we have work to do from a perception perspective. People hear “Atlanta” and they think “Georgia,” and it’s not the same thing. I’ve had friends of mine move down here from DC and New York of all races and genders and sexual orientations, and they are quick to find a great community for themselves in Atlanta. It’s perception versus reality.

Stan Sonenshine, Managing Partner, Preferred Real Estate Funds:
Atlanta is a very dynamic city. It’s got a lot going for it. It’s the capital of the South and the engine that drives the region. It’s got great universities and a young, well-educated population. The airport is a huge advantage, and not only do we have Hartsfield, but Peachtree DeKalb as a secondary airport is a terrific asset. It would enable Amazon executives to fly in and out of here pretty easily.

I think Atlanta is a fair fit for Amazon, but not a great fit. All the cities that are still in the hunt have their strengths and weaknesses, but Atlanta’s got a huge Achilles heel: traffic. The traffic is horrendous, and the roads infrastructure is woefully inadequate. I scratch my head as to how we fix that. Amazon’s going to plop a city within a city in one place, and all those workers either have to live there or get there. I don’t think Atlanta was built for that. You’re talking about putting a huge development in there, and then you’re just going to have to try to catch up. I don’t know how you do that.

Joe Pella, Senior Vice President, SunTrust Commercial Real Estate:
Atlanta has a lot of what Amazon is looking for. Just from a land standpoint the region has a number of different locations Amazon could choose. You can get to 80 percent of the US population within a two-hour flight from Atlanta, and you can also get to destinations internationally. Atlanta is a massive beneficiary of the Port of Savannah. It has rail and Interstate connectivity and local rapid transit that stacks up well against other peer cities. It has pretty good housing affordability and ranks among the top 10 metro areas in terms of cost of doing business. When you put it all together, Atlanta checks off a number of the items Amazon wants.

I don’t necessarily see a serious flaw for Atlanta. It has become a tech city. Look at NCR moving their headquarters into Midtown. Look at Anthem building a new technology hub next to Georgia Tech. It’s a very diverse city from both a business standpoint and a cultural standpoint. The business environment in Atlanta and the way the city and the state work together is a massive positive. It’s a partnership that also includes business leaders in a number of different efforts to recruit and retain companies and talent. That coordination and that team approach is important.

Chris Clark, President and CEO, Georgia Chamber of Commerce:
With Atlanta, it comes down to talent. We have 32 colleges and universities in the 13-county Atlanta region. Over the next 12 years you’re going to have 1.5 million more Georgians than you have today, a lot of them moving from all over the world, which adds to the talent pool. Also, over the next 12 years, Atlanta will grow its millennial workforce by 25 percent, more than pretty much any other city in the Southeast. Add in all the different avenues to feed and develop that talent pipeline and Atlanta makes a very compelling argument for Amazon.

There’s no way Atlanta’s East Coast competitors can compete with us for cost of living. We have some of the lowest housing rates in the country. If you look at the arts scene and the redevelopment projects like the Beltline that are going on around Atlanta, the cultural scene is really coming alive. And it’s really transitioning from a baby boomer culture to being a millennial culture. It’s really an exciting time to be here.

In Georgia, whether it’s Democrats in charge or Republicans in charge, we have a history of working across the aisle to do what’s right to create jobs and grow the state of Georgia. We’ve had a long, vibrant history of working together and being pro-business and pro-jobs. Progressive Democrats and Governor Deal alike are focused on business growth, what’s good for talent development and what’s best for the state. Georgia is a state that’s warm with hospitality and welcoming to multinational companies and talented men and women from all over the world.

Former Mayor Sam Massell, President, Buckhead Coalition:
Amazon could actually fit in Buckhead. In Buckhead alone, we’ve got 17,000 multi-family rental units under development in various stages. That makes housing available to a labor market. We have I-75/I-85 a mile away and Georgia 400 right through the center. We have three MARTA [Metro Atlanta Rapid Transit Authority] stations in Buckhead. We’ve got everything they’ve asked about. We’ve got 300 places to eat and drink. That in itself makes for a happy environment.

The airport is Atlanta’s top asset. You’ve got access to the world at your right hand. What a lot of people don’t appreciate is that the legislature made it so that you can’t take any money out of that airport. It flows with funds, but the money has to stay there so that we have the ability to make improvements as necessary. If the airport needs new parking decks, it can add them. If it needs new runways, it can add them. Anything that airport wants and needs it can do tomorrow.

Atlanta is a great fit for Amazon. Atlanta is a can-do city. We did the Olympics when no one thought it possible. We put in mass transit when no one thought it possible. We’ve hosted the Democratic National Convention when no one thought that was possible. Atlanta has the leadership, the willingness, and the ambition for Amazon. Yes, Atlanta can handle it, and Atlanta will.

Why Another European Auto Giant Picked Atlanta for its North American Base

The 2017 Citroën C4 Cactus

Photo by WilliamCrozes@PLANIMONTEUR

Groupe PSA’s January 2018 announcement of Atlanta as its North American headquarters wasn’t the French automotive giant’s first announcement on US soil. That came in October 2017, when the maker of Peugeot, Citroën and Opel/Vauxhall vehicles launched its Free2Move aggregation platform in Seattle.

With the goal of being a major player in the North American mobility space, Free2Move is a smartphone-based “mobility aggregation platform” that allows users in Seattle to compare the location, characteristics and operating costs of available transportation options, including offerings from Car2Go, Zipcar then TravelCar. Free2Move also accesses several bike-sharing services, including Ofo Bike, Lime Bike and Spin Bike. The service is positioned to help solve challenges from contemporary trends such as urbanization and digitalization.

“As we begin to add more providers and roll out to new cities, Free2Move will enrich the lives of Americans who embrace innovative, non-traditional forms of transportation,” explained Groupe PSA Senior Vice President of Mobility Brigitte Courtehoux. Groupe PSA’s North America President and CEO, Larry Dominique, also was in attendance, noting, “The decision to launch a service that helps people move around in the most efficient way underscores our commitment to the future of Groupe PSA. As mobility services evolve and innovate based on the way people think about and consume mobility, bringing Free2Move stateside provides us with a unique way to address consumer demands, as well as a flexible platform to roll out future products.”

Larry Dominique

In October 2017, following the Seattle announcement and prior to the official naming of Atlanta as the location for Groupe PSA’s North American headquarters — joining Mercedes-Benz and Porsche in choosing the Georgia capital for their own North American headquarters — Larry Dominique shed light on the Atlanta location with Site Selection Editor in Chief Mark Arend. Following are some highlights of that discussion.

What are your plans for the North American market?
This is a multi-phase entry into the market. We want to come back into the United States in a very thoughtful way. We are starting our business by launching mobility services, which was the Free2Move announcement in Seattle. We will grow mobility services in several cities while we are preparing cars in terms of US regulations and so forth. We don’t have a specific timeline on when we will begin selling cars other than that the whole project to make sure that we are back in running successfully is a 10-year project, and that started over a year ago.

As for the headquarters, we have a physical office as of January, starting with about a dozen people. We’ll scale up from there. Within four to five years, we expect to have 120-plus jobs in Atlanta. The actual timeline will depend on how quickly we ramp up certain part of the business — how quickly we launch the cars. The trajectory is there, but the actual timeline for numbers of people is fluid.

This is a transfer of Groupe PSA’s mobility business model to the US?
Yes, we have mobility services — Free2Move aggregation — in Europe, and we’re bringing that same business model here to the US. We will have to nuance it, because American consumers are different from German and French and Spanish consumers. There are unique mobility needs in the United States, and startups here that don’t exist in Europe. We have the ability here to experiment on the mobility side if it’s the right opportunity.

In terms of car sales, we want to think of buying and selling cars and the customer journey associated with that in a very new, digital, innovative way. We want to be a customer-centric brand so as we are preparing vehicles, we are spending a lot of energy — this is where the headquarters function comes in — on analysis and understanding of US consumers related to the future of car buying and the ownership process of shopping, buying, owing and replacing a vehicle. We will be looking at the US market in a very thoughtful, innovative way. We want to be disruptive.

Why is Atlanta the best location in which to build Groupe PSA’s North American business?
What this means for Atlanta and for Georgia is that I will not be hiring a bunch of OEM people and transplanting them from Detroit or Los Angeles or Virginia to Atlanta — or from elsewhere in Atlanta from Porsche or Mercedes. I will be looking for people that may be from e-commerce, the high technology space, startup people. I will be looking for a broad array of talent, which is behind relationships we have with the state and the city and Georgia Tech and the University of Georgia system. Other corporations and technology providers are at home in Atlanta, so it’s a great business environment in which to foster growth and innovation.

Another reason we chose Atlanta is this mix of business cultures. It’s part of the Smart City Initiatives, which will expand. There is innovation happening in the city. A lot of discussions are taking place about expanding mobility initiatives in the city, and we want to be a part of that. And there is a strong car culture in the Greater Atlanta area. It’s a great blend of people who still love cars, people who are in this evolving marketplace in terms of how to think about transportation and areas of technology and connected cars and connected cities, which are key elements for everything automobile companies are going to do in the future. It’s a great blend that’s not too weighted in one category or another. There is a broad array of opportunities to work within.

In Southeast Georgia, The Future is Now

The Port of Savannah handled 8.5 percent of U.S. containerized cargo volume and 10 percent of all U.S. containerized exports in FY2017.

Photo courtesy of Georgia Ports Authority

It’s only 2018, but it’s never too soon to plan for 2028.

At least that’s the case for the booming activity at the Georgia Ports Authority’s operations in Savannah and Brunswick, and its inland intermodal ports. Overall, the GPA’s deepwater ports and inland barge terminals support more than 370,000 jobs throughout the state annually and contribute $20.4 billion in income, $84.1 billion in revenue and $2.3 billion in state and local taxes to Georgia’s economy. The Port of Savannah handled 8.5 percent of US containerized cargo volume and 10 percent of all US containerized exports in FY2017, as it grew its volumes by more than 400,000 twenty-foot equivalent container units (TEUs) in 2017, for a record total of more than 4 million TEUs.

The GPA’s new 2028 Plan calls for capacity to reach 10 million TEUs, 1 million rail lifts, and more than 1 million auto and machinery units per year, using 42 ship-to-shore cranes, 200 yard cranes, new RTG lanes and significant intermodal expansion in Savannah. The GPA will soon open its second inland terminal in Northwest Georgia and break ground on the Mason Mega Rail project at Garden City Terminal. “Combined, both intermodal projects will open new markets while significantly reducing rail crossings and over-the-road freight through Savannah, Atlanta and beyond,” the GPA announced.

The GPA’s roll-on, roll-off operation at the Port of Brunswick, halfway between Savannah and Jacksonville, is the largest of its kind in North America, as it moves toward annual capacity of 1.4 million vehicles. The GPA has spent $25 million over the past year to increase roll on/roll off (Ro/Ro) space, and plans to spend another $20 million in the next 18 months to grow and attract additional auto business to Georgia.

Since Governor Nathan Deal was elected in 2010, trade through Georgia’s ports has grown from 2.8 million TEUs to more than 4 million TEUs in 2017. Ro/Ro cargo has expanded from 411,000 units to more than 640,000 units per year, and cargo crossing all docks has grown from 25 million tons in 2010 to 35 million tons in 2017.

Savannah’s outer harbor dredging will be finished in March, bringing the Savannah Harbor Expansion Project to 50 percent completion. Deepening the inner harbor should be complete by late 2021, allowing giant vessels to take on more cargo and transit the river with greater scheduling flexibility.

“With the project moving forward, the fiscal argument for the Savannah Harbor deepening grows stronger and stronger as more customers choose Georgia as a gateway to serve the Southeast,” said GPA Executive Director Griff Lynch. “The ability for these ships to take on heavier export loads will mean greater efficiency and lower costs for American producers.”

Moving Things and Making Things

To accommodate additional warehousing, the GPA has opened five 100-acre parcels of land at its Savannah International Trade Park for private development. Only five miles from Garden City Terminal, the site could add up to 5 million additional square feet of distribution space to the area’s already robust portfolio, and more is on the way a little further out, as the 2,600-acre Savannah Gateway Industrial Hub begins to take shape in Effingham County.

Hussey Gay Bell, a Savannah-based design firm with offices in six cities around the South, put together the master plan for the new hub, and has been working on regional infrastructure projects for years. The firm did the survey work for the Mason Mega Rail project in 2017, and recently helped Port Fresh Logistics bring sorely needed refrigerated warehouse space online in southern Effingham County. “It’s a service we need in our area, and they are booming right now,” says C. J. Chance, principal at Hussey Gay Bell. Warehouse and logistics vacancy rates have been hovering between 2 percent and 3 percent, he says.

The ideal complement to all that logistics activity is manufacturing goods to put on all those containers. So Chance is glad to see the Savannah Economic Development Authority and Chatham County purchasing around 600 acres (243 hectares) zoned for heavy industrial use, adding to an area manufacturing portfolio that includes JCB and Gulfstream, as well as a new Georgia Quickstart Advanced Manufacturing Center opening near the state’s megasite at I-16 and I-95 later this year. “The thing we like the most,” Chance says, “is that with manufacturing typically you need suppliers. They may not co-locate, but they locate around the area,” where Interstate frontage and industrial parcels in Bulloch, Bryan and Effingham counties are ready to go.

But it all begins where the land meets the water.

“With the ports and dredging project and the post-Panamax ships coming in,” Chance says, “it certainly sets the stage for an uptick in all industrial development.”

— Adam Bruns

Augusta Braces for 'Cyber Tsunami'

Augusta, Georgia’s cyber scene, like Jack Nicklaus in the final round of the 1986 Masters tournament, has surged forward with head-spinning force.

Just as no one foresaw Nicklaus leap-frogging the field on Sunday to win for a sixth time at Augusta National Golf Club, few could have expected that the quaint town of 200,000 people would be included in a Fortune Magazine survey of cities and regions vying for the title of “cybersecurity capital of the world.” But there was Augusta, cited as a growing cyber powerhouse among the likes of Silicon Valley; Washington, D.C.; London; Atlanta; Boston; and Tel Aviv.

Why Augusta?

The trigger for the city’s unfolding rise was the Pentagon’s 2013 decision to designate Augusta’s Fort Gordon as headquarters of the US Army’s Cyber Command. Currently based at Fort Meade, Maryland, also home to the National Security Agency, Army Cyber is beefing up its mission as it moves en masse to Augusta after a hotly-contested, four-year site search. In August, President Trump initiated the process to elevate the Army’s cyber force to a unified combatant command, one of 10 within the military hierarchy.

“We’re anticipating 4,000-plus families moving to the area, all related to cyber,” says Michael Shaffer, executive vice president of strategic partnerships and economic development at Augusta University. “When Army moves major pieces like this, communities need to be prepared.”

Fort Gordon, which covers 56,000 acres (22,662 hectares), already is home to a training institution for cyberspace operations, known as the Cyber Center for Excellence, and to an NSA intelligence-gathering facility that reportedly employs several thousand people in communications intercepts. The new Cyber Command complex, to be completed in early 2019, is expected to have space for thousands of soldiers and civilian contractors; Augusta’s need for cyber warriors is thus becoming acute.

“They’re going to bring a number of very high-paying positions to the state,” says Calvin Rhodes, executive director of the Georgia Technology Authority and CIO to Georgia Governor Nathan Deal. “As we would do in any large economic development effort, we’re trying to help them to attain workforce they need to be successful. And the hardest person to find across the globe today is a skilled cybersecurity professional.”

Building a Cyber Workforce

That’s the impetus behind the Georgia Cyber Innovation and Training Center, currently under construction on state-owned land on Augusta’s riverfront. The state-funded facility, being built on an expedited track, is to focus on cyber workforce training, education, tech startups, research and development, and will even include a law enforcement component as headquarters to a new cyber-crime unit of the Georgia Bureau of Investigation. At a projected cost of $100 million, state officials call the two-building complex the largest single investment in a cybersecurity center in the country. Partners in the project are numerous. They include Army Cyber, which is consulting in the design of the complex, Augusta University, Augusta Technical College, private businesses, the U.S. Secret Service and the NSA.

“We’re in discussions with several different units of the military that are interested in this space,” says Augusta University’s Shaffer. The Cyber Center will also include rented space for military contractors.

“As we’ve looked at companies that may be interested in leasing space in the center,” Shaffer says, “we tell them that on any given day you may have 400-500 students in one building, and that’s when their eyes light up. For cyber talent, it’ll be like shooting fish in a barrel.